Facebook (NASDAQ:FB) is reportedly developing a cryptocurrency that will let users send money via its WhatsApp messaging app. The new cryptocurrency would launch first in India—a country with over 200 million Whatsapp users and the world’s leader in sending money home.
According to Bloomberg, the company is creating a stablecoin, a digital currency that is pegged to a fiat currency—often the US dollar. These types of cryptocurrencies are supposed to be less volatile than regular cryptos.
Though not nearly at a launch stage, sources say that Facebook is currently working on the strategy “including a plan for custody assets, or regular currencies that would be held to protect the value of the stablecoin.”
First Blockchain, Now Crypto?
The company has been very hush-hush about its blockchain initiatives. However, what is known is that Facebook has already hired 40 members for its blockchain team. A spokesperson gave little away but confirmed the company’s plans to move in this direction:
“Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology […] This new small team is exploring many different applications. We don’t have anything further to share.”
The company also hinted at movements into the financial sector when it hired David Marcus to lead its Messenger app team in 2014. Marcus was the former president of PayPal. He then moved to lead the blockchain initiatives team in May of this year.
There has been a surge in popularity for stablecoins this year. The most high-profile stablecoin is also the pioneering one—Tether. Surrounded by controversy, Tether’s refusal to be audited has led to questions over each token being backed by one US dollar, as purported by its creators.
However, Facebook has 2.5 billion global users and more than $40 billion in annual revenue. It may just have everything it takes to develop a stablecoin that works. If it is successful in this venture it would be the first large technology company to launch such a project.
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